The geniuses at Porsche have just done what half the civilised world has been thinking of doing these past few weeks and stuffed it to hedge funds and banks. The numbers are still all over the place as people try to unravel the great Stuttgart Sting. But what appears to have happened is this.

Porsche had been itching to buy Volkswagen for years. But it was struggling to raise the money. So instead of getting a traditional bank loan or issuing equity, it decided to pick the pockets of British and American hedge funds, the very funds, in fact, which have belittled stodgy old German enterprise and called it out of date. The funds which one leading German politician called "locusts" for preying on businesses while adding no value.

These funds thought VW was overpriced and reckoned Porsche was insane trying to buy it. It was nothing but a quixotic fantasy of Ferdinand Piech, the grandson of Porsche's founder and a former chief executive of VW. Porsche, after all, had annual revenues of just £5.2bn to VW's £83bn. Its market cap was around a third of its takeover target.

British and American hedge funds have belittled stodgy old German enterprise and called it out of date

But Piech's intimate knowledge of VW had allowed Porsche to make enormous profits trading options on VW stock. What occurred over the weekend was the climax of this strategy. Hedge funds such as SAC and Greenlight in the US and Odey and Marshall Wace in London were eagerly shorting VW stock; borrowing, selling it and promising to return it later. They reckoned the stock price would fall and they could buy it back cheaply and pocket the difference.

What Porsche appears to have known, however, is that the volume of available shares was quickly dwindling. They knew this because they had been quietly building their own position in VW, through shares and derivatives, to 74 per cent of the firm. A further 20 per cent was owned by the government of Lower Saxony, and another five per cent owned by index tracking funds, leaving a tiny number of shares floating freely on the market.

It is conceivable that Porsche and its banks were the ones lending the hedge funds the shares and then buying them back through proxies. So while the hedge funds thought there was a large and liquid market in VW shares, Porsche knew otherwise.

On Sunday afternoon, Porsche played its hand. It announced that it controlled 74.1 per cent of VW. German law had not required it to disclose this information beforehand. The hedge funds did their calculations and freaked out. They had borrowed 15 per cent of VW and now it turned out Porsche may have lent them most of that.

They immediately began scrambling for what little stock was out there to close out their short position. Some were reported to be sobbing on the phone to their brokers. Too many traders chasing too little stock sent the price of VW soaring, pushing the company at one point on Monday past Exxon to make it the most valuable in the world. All Porsche needed to do at this point was sit back and smile. It had made billions in paper profits.

‘The chaos around VW overwhelmingly hit professional gamblers. Sympathy does not seem appropriate’

Then came the reckoning. On Wednesday Porsche announced it would release five per cent of VW's stock to ease pressure on the short sellers. The share price of VW is still around two-and-a-half times where it was last week and Porsche could make around £5bn on this portion of its manoeuvre alone.

But even better, Porsche owned cash-settlement call options on 31.5 per cent of VW which, according to the New York Times, matured yesterday. If true, this earned them the difference in cash between 31.5 per cent of VW valued around last Friday's closing price of 210 Euros per share and yesterday’s price of 517 Euros, an astonishing return. When VW's price returns to normal, Porsche should have more than enough cash to buy control.

Germany seems to be on Porsche's side in all this. Die Tageszeitung, a liberal newspaper, wrote on Wednesday: "As opposed to previous speculative bubbles that cost a lot of small investors their money in the stock exchange casino, the chaos around VW shares overwhelmingly hits professional gamblers. Sympathy does not seem appropriate."

DEVELOPMENT: Bretton Woods II: New Lifeline for Ailing GiantsAnalysis by John Vandaele*

BRUSSELS, Oct 28 (IPS) - Europe, by way of the hyperactive French President Nicolas Sarkozy, demands a Bretton Woods II, that is, a major shake-up of the International Monetary Fund (IMF) and the World Bank. This is as much a rescue operation for two organisations that have lost muscle as a call for a new financial architecture.

Up until mid-October 2008 the IMF, the world's most important financial institution, did not play a role in the unfolding credit crisis. The G7 (the seven industrialised nations, the United States, Canada, France, Britain, Germany, Italy and Japan) had given the task to make recommendations to the Financial Stability Forum dominated by the G7 countries, effectively bypassing the Fund.

Also, the IMF proved powerless in prevention of the crisis. For years the Fund deplored the rising macro-economic imbalance between China and the U.S., which lies at the heart of the current crisis. The IMF had to do this because article 1 of its charter says one of the purposes of the IMF is "to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members." But the Fund simply has no real power over countries such as the U.S. or China.

With the crisis now deepening, Iceland, Ukraine and Pakistan asked the IMF for financial assistance, the first countries in several years to do so. Others will follow. It seems the Fund is -- a little bit -- back in business. Still, there's an awful long way to go if the Bretton Woods Institutions (BWIs, the IMF and the World Bank) are to prevent a repeat of the crisis. That's why Sarkozy pleads for a Bretton Woods II.

It certainly wouldn't be the first change for these two institutions. After all, from the seventies on, the main task of the International Monetary Fund (IMF) and the World Bank clearly shifted from assuring reconstruction and financial stability in the rich countries to developing countries.

That shift was born of a double necessity. On the one hand the World Bank and IMF were looking for a new job. Rich countries didn't really need the IMF and the World Bank any more. Reconstruction was more or less finished, rich country governments could borrow money from their populations or from international financial markets which were 'reborn' from the seventies on. The IMF too lost its task as guardian of the Bretton Woods system of more or less stable exchange rates after the United States cancelled the link between the dollar and gold, and floated the dollar.

On the other hand those reborn financial markets, in a matter of years sparked a major debt crisis of developing countries. Western banks, flush with petrodollars from the Arab world, pushed their loans on developing countries. Many of them at the time were governed by unelected leaders who didn't always use the loans in a sensible way.

During the seventies loans were very cheap, but that wouldn't last. In an effort to combat the world inflation the U.S. had created by printing too many dollars -- to finance the Vietnam war and its own war on poverty -- Paul Volcker, president of the U.S. central bank, abruptly changed course by raising interest rates dramatically.

Since most of the loans of developing countries had a variable interest rate -- depending on the rates in London or New York -- their debt service doubled or tripled. In a matter of years the financial net closed upon many developing countries. Country after country couldn't pay its debts, and it was decided that the IMF and the World Bank would manage the debt crisis.

From then on the Bretton Woods Institutions (BWIs) were very asymmetrical organisations. The rich countries didn't need the BWIs any more, but with more than 60 percent of the vote they called the shots in both institutions. Developing countries really depended upon the BWIs, but didn't have a lot to say there.

And so the BWIs developed into an instrument of western power. In return for loans the BWIs pushed the same ideological recipes on all those different countries: privatisation, deregulation, liberalisation...

First, the rigidity didn't make sense. There are many differences among countries, and timing is crucial for those kinds of measures. Second, it became obvious that rich countries were judge and party. When they forced developing countries to open their markets, it was no coincidence that western multinationals tended to be among the first beneficiaries.

Thirdly, the reforms tended to worsen poverty in many countries since government expenditure had to be reduced. Finally, the BWIs underestimated the all-important role of government and governance. It is ironic that the BWIs nowadays very much stress the role of governance, and of ownership: they have realised that it's not very useful to push policies upon countries. The enormous protests also forced them to think more about the social consequences of their policies.

Lack of transparency and accountability was another problem of the BWIs. Since the minutes of the executive boards are secret for at least ten years, it is very difficult to know for countries what their director is saying on their behalf. Europeans have reason to question their representatives on this: the EU countries until recently had 32 percent of the votes against 17 percent for the U.S. Still, both institutions had a very hard-line neo-liberal approach for many years, questioning the good sense of minimum wages and collective labour agreements and public pension systems, all of which are mainstream in Europe.

Developing countries and civil society for many years criticised the power distribution at the BWIs. How is it possible that small European countries like Switzerland or Belgium had more votes then India, Brazil or Mexico? The reason was that power was based upon the money countries put into the BWIs, and that again was based on the economic weight of a country.

That weight was determined through rather vague formulae. The unequal power distribution is under pressure now: last April it was decided that rich countries at the IMF would give in 3 percent of the votes; 2 percent went to emerging countries and 1 percent to other developing countries. For developing countries this is just a start.

This lack of voice in both institutions and the adverse conditionality, especially during the Asian financial crisis, stimulated developing countries to turn away from the BWIs. China, and to a lesser degree, other emerging countries, partly overtook the role of the World Bank in financing big infrastructural works in developing countries. Developing countries also tried to avoid the IMF if one day they would have currency problems. That's why many of them have built large foreign currency reserves.

With the credit crunch deepening, Iceland and Pakistan approached the IMF but not after first negotiating deals with Russia, China or Arab countries. The IMF-Iceland package was less conditional than the usual IMF stuff.

Sarkozy's call for a second Bretton Woods is timely. Crises are opportunities. Some of his ideas -- tighter supervision of the international banking system, a crackdown on international tax havens to attack unfair tax competition between states...have been demanded for many years by large swaths of the global civil society. Why not add a currency transaction tax?

But if Sarkozy is serious about a Bretton Woods II, he'd better keep in mind that developing countries want more voice. The first victim of this will be the European countries which are overrepresented at the Fund. Why, for that matter, should the managing director of the Fund always be a European? And what is the credibility of the Fund if big countries can ignore the Fund's recommendations and in so doing, create a global financial crisis? So, there's a lot of ground to be covered. That discussions will start with a Group of 20 with a majority of developing countries is a good sign.

*This is one of a set of four articles on the global institutions by John Vandaele, journalist with the Belgian magazine Mo*, and author of several books on globalisation, most recently 'The Silent Death of Neoliberalism, 2007. (END/2008)

DAVID WEIDNER'S WRITING ON THE WALLBeyond write-downsCommentary: The world's banking system shows some disturbing trendsNEW YORK (MarketWatch) -- The world's financial system is such a mess that no one is really quite sure where to begin fixing it.It's as if all those runs on the banks withdrew banking knowledge along with deposits.

But the system's problems are far greater than the public or the people in the banks seem to realize. That's what some have concluded after looking over preliminary results of an ongoing banking study being conducted by IBM.

Normally, banking studies are usually throwaway surveys that are outdated the moment the data are released. But in this case, the people at Big Blue are going a little deeper. For one, they're doing 140 face-to-face interviews with middle- and top-level executives. They've also buttressed that data with a quantitative survey of 2,000 industry players, including educators, analysts and regulators.The idea behind this global study is to find out how the financial pros think -- not just on a particular day, but over time. That's why the full study won't be finished until March 2009. However, the researchers were surprised by some of the early findings and wanted to pass them on. What they are unveiling is just a taste.Much of what the IBM team, led by Suzanne Duncan, found can be summed up this way: Bankers and financial professionals are flabbergasted. That's my assessment, anyway. You be the judge. Here are some of the preliminary conclusions:

* The No. 1 issue that keeps bankers and financial professionals awake at night is a lack of strategy - or, as Duncan put it, a "business model identity crisis" -- according to nearly 80% of board and C-level executives. "They don't know what they want to be when they grow up," Duncan said. * The other 20% are just worried about surviving. * Financial executives are disturbingly out of touch with their clients. That could be institutions, "average Joes," as Duncan called them, or trading partners -- really anyone who pays money to a bank or financial firm.

IBM found that if you took a list of the top 12 things customers are willing to pay for, ranked them in order of value and then flipped the list over, you'd be pretty close to the list made by financial executives. In other words, bankers think we want one thing, and we want just the opposite.It's that last point -- the idea that executives who are paid so much to know exactly what customers want and what to charge for it -- that is so disturbing. But it's also revealing why these big shots are so off base.They think we want one-stop shopping. Sound familiar? It's the refrain we've heard from financial supermarkets like Citigroup Inc., Bank of America Corp.,and J.P. Morgan Chase & Co. for years.

Top executives like Sanford Weill and Ken Lewis have been pushing the supermarket model as a way to diversify earnings, but also because that's what they claim customers want. Customers, the CEOs say, want to have their brokerage account and their checking account at the same place where they have an auto loan and an insurance policy.

Ask yourself: Is that what you really want from a bank or brokerage? Of course not. When asked what they'd be willing to pay for, customers -- whether institutions or individuals -- tended to give the same answers. Their top answer, according to IBM, is superior execution - or "make my life easier," Duncan said.

Was that really so hard to guess? People want products that work and good customer service. They don't want a sales pitch for something else every time they walk in the door.

The problem is that financial-company executives don't think in the same terms as the rest of us. Buying a mansion in the south of France? A private jet makes the perfect add-on. Hiring a lawyer to deal with all of those subpoenas? You'll probably need a public-relations team to help out, too.

You get the idea. There's a serious disconnect happening between the executive suite and the front of the store. The good news is some firms are beginning to realize it. Duncan said she's seeing a trend in which financial firms are working to simplify their operating models.

It's not unlike what's happening at UBS AG , where wealth management is being separated from asset management. The idea is to have divisions feel more autonomous, less confused and more focused on serving their customers.

As for the credit crisis? Duncan said there's agreement on a few things: The profits of the past are gone forever; consolidation will continue at a break-neck pace; and a new breed of companies, called "alpha firms," will emerge on the landscape. They're called "alpha" because no one knows exactly what they will do. They could be hedge funds or private-equity firms or something completely different.

They will be the new Wall Street -- until they break and we have to start all over again. David Weidner covers Wall Street for MarketWatch.

* The Russian Resurgence * Crisis in South Ossetia * Political Economy and the Financial Crisis

In 1989, the global system pivoted when the Soviet Union retreated from Eastern Europe and began the process of disintegration that culminated in its collapse. In 2001, the system pivoted again when al Qaeda attacked targets in the United States on Sept. 11, triggering a conflict that defined the international system until the summer of 2008. The pivot of 2008 turned on two dates, Aug. 7 and Oct. 11.

On Aug. 7, Georgian troops attacked the country’s breakaway region of South Ossetia. On Aug. 8, Russian troops responded by invading Georgia. The Western response was primarily rhetorical. On the weekend of Oct. 11, the G-7 met in Washington to plan a joint response to the global financial crisis. Rather than defining a joint plan, the decision — by default — was that each nation would act to save its own financial system with a series of broadly agreed upon guidelines.

The Aug. 7 and Oct. 11 events are connected only in their consequences. Each showed the weakness of international institutions and confirmed the primacy of the nation-state, or more precisely, the nation and the state. (A nation is a collection of people who share an ethnicity. A state is the entity that rules a piece of land. A nation-state — the foundation of the modern international order — is what is formed when the nation and state overlap.) Together, the two events posed challenges that overwhelmed the global significance of the Iraqi and Afghan wars.The Conflict in Georgia

In and of itself, Russia’s attack on Georgia was not globally significant. Georgia is a small country in the Caucasus, and its fate ultimately does not affect the world. But Georgia was aligned with the United States and with Europe, and it had been seen by some as a candidate for membership in NATO. Thus, what was important about the Russian attack was that it occurred at all, and that the West did not respond to it beyond rhetoric.

Part of the problem was that the countries that could have intervened on Georgia’s behalf lacked the ability to do so. The Americans were bogged down in the Islamic world, and the Europeans had let their military forces atrophy. But even if military force had been available, it is clear that NATO, as the military expression of the Western alliance, was incapable of any unified action. There was no unified understanding of NATO’s obligation and, more importantly, no collective understanding of what a unified strategy might be.

The tension was not only between the United States and Europe, but also among the European countries. This was particularly pronounced in the different view of the situation Germany took compared to that of the United States and many other countries. Very soon after the Russo-Georgian war had ended, the Germans made clear that they opposed the expansion of NATO to Georgia and Ukraine. A major reason for this is Germany’s heavy dependence on Russian natural gas, which means Berlin cannot afford to alienate Moscow. But there was a deeper reason: Germany had been in the front line of the first Cold War and had no desire to participate in a second.

The range of European responses to Russia was fascinating. The British were livid. The French were livid but wanted to mediate. The Germans were cautious, and Chancellor Angela Merkel traveled to St. Petersburg to hold a joint press conference with Russian President Dmitri Medvedev, aligning Germany with Russia — for all practical purposes — on the Georgian and Ukrainian issues.

The single most important effect of Russia’s attack on Georgia was that it showed clearly how deeply divided — and for that matter, how weak — NATO is in general and the Europeans are in particular. Had they been united, they would not have been able to do much. But they avoided that challenge by being utterly fragmented. NATO can only work when there is a consensus, and the war revealed how far from consensus NATO was. It can’t be said that NATO collapsed after Georgia. It is still there, and NATO officials hold meetings and press conferences. But the alliance is devoid of both common purpose and resources, except in very specific and limited areas. Some Europeans are working through NATO in Afghanistan, for example, but not most, and not in a decisive fashion.

The Russo-Georgian war raised profound questions about the future of the multinational military alliance. Each member consulted its own national interest and conducted its own foreign policy. At this point, splits between the Europeans and Americans are taken for granted, but the splits among the Europeans are profound. If it was no longer possible to say that NATO functioned, it was also unclear after Aug. 8 in what sense the Europeans existed, except as individual nation-states.The Global Financial Crisis

What was demonstrated in politico-military terms in Georgia was then demonstrated in economic terms in the financial crisis. All of the multinational systems created after World War II failed during the crisis — or more precisely, the crisis went well beyond their briefs and resources. None of the systems could cope, and many broke down. On Oct. 11, it became clear that the G-7 could cooperate, but not through unified action. On Oct. 12, when the Europeans held their eurozone summit, it became clear that they would only act as individual nations.

As with the aftermath of the Georgian war, the most significant developments after Oct. 11 happened in Europe. The European Union is first and foremost an arrangement for managing Europe’s economy. Its bureaucracy in Brussels has increased its authority and effectiveness throughout the last decade. The problem with the European Union is that it was an institution designed to manage prosperity. When it confronted serious adversity, however, it froze, devolving power to the component states.

Consider the European Central Bank (ECB), an institution created for managing the euro. Its primary charge — and only real authority — is to work to limit inflation. But limiting inflation is a problem that needs to be addressed when economies are otherwise functioning well. The financial crisis is a case where the European system is malfunctioning. The ECB was not created to deal with that. It has managed, with the agreement of member governments, to expand its function beyond inflation control, but it ultimately lacks the staff or the mindset to do all the things that other central banks were doing. To be more precise, it is a central bank without a single finance ministry to work with. Unlike other central banks, whose authority coincides with the nations they serve, the ECB serves multiple nations with multiple interests and finance ministries. By its nature, its power is limited.

In the end, power did not reside with Europe, but rather with its individual countries. It wasn’t Brussels that was implementing decisions made in Strasbourg; the centers of power were in Paris, London, Rome, Berlin and the other capitals of Europe and the world. Power devolved back to the states that governed nations. Or, to be more precise, the twin crises revealed that power had never left there.

Between the events in Georgia and the financial crisis, what we saw was the breakdown of multinational entities. This was particularly marked in Europe, in large part because the Europeans were the most invested in multilateralism and because they were in the crosshairs of both crises. The Russian resurgence affected them the most, and the fallout of the U.S. financial crisis hit them the hardest. They had to improvise the most, being multilateral but imperfectly developed, to say the least. In a sense, the Europeans were the laboratory of multilateralism and its intersection with crisis.

But it was not a European problem in the end. What we saw was a global phenomenon in which individual nations struggled to cope with the effects of the financial crisis and of Russia. Since the fall of the Soviet Union, there has been a tendency to view the world in terms of global institutions, from the United Nations to the World Trade Organization. In the summer of 2008, none of these functioned. The only things that did function effectively were national institutions.

Since 2001, the assumption has been that subnational groups like al Qaeda would define the politico-military environment. In U.S. Defense Department jargon, the assumption was that peer-to-peer conflict was no longer an issue and that it was all about small terrorist groups. The summer of 2008 demonstrated that while terrorism by subnational groups is not insignificant by any means, the dynamics of nation-states have hardly become archaic.The Importance of the State

Clearly, the world has pivoted toward the nation-state as the prime actor and away from transnational and subnational groups. The financial crisis could be solved by monetizing the net assets of societies to correct financial imbalances. The only institution that could do that was the state, which could use its sovereign power and credibility, based on its ability to tax the economy, to underwrite the financial system.

Around the world, states did just that. They did it in very national ways. Many European states did it primarily by guaranteeing interbank loans, thereby essentially nationalizing the heart of the financial system. If states guarantee loans, the risk declines to near zero. In that case, the rationing of money through market mechanisms collapses. The state must take over rationing. This massively increases the power of the state — and raises questions about how the Europeans back out of this position.

The Americans took a different approach, less focused on interbank guarantees than on reshaping the balance sheets of financial institutions by investing in them. It was a more indirect approach and less efficient in the short run, but the Americans were more interested than the Europeans in trying to create mechanisms that would allow the state to back out of control of the financial system.

But what is most important is to see the manner in which state power surged in the summer and fall of 2008. The balance of power between business and the state, always dynamic, underwent a profound change, with the power of the state surging and the power of business contracting. Power was not in the hands of Lehman Brothers or Barclays. It was in the hands of Washington and London. At the same time, the power of the nation surged as the importance of multilateral organizations and subnational groups declined. The nation-state roared back to life after it had seemed to be drifting into irrelevance.

The year 1989 did not quite end the Cold War, but it created a world that bypassed it. The year 2001 did not end the post-Cold War world, but it overlaid it with an additional and overwhelming dynamic: that of the U.S.-jihadist war. The year 2008 did not end the U.S.-jihadist war, but it overlaid it with far more immediate and urgent issues. The financial crisis, of course, was one. The future of Russian power was another. We should point out that the importance of Russian power is this: As soon as Russia dominates the center of the Eurasian land mass, its force intrudes on Europe. Russia united with the rest of Europe is an overwhelming global force. Europe resisting Russia defines the global system. Russia fragmented opens the door for other geopolitical issues. Russia united and powerful usurps the global stage.

The year 2008 has therefore seen two things. First, and probably most important, it resurrected the nation-state and shifted the global balance between the state and business. Second, it redefined the global geopolitical system, opening the door to a resurgence of Russian power and revealing the underlying fragmentation of Europe and weaknesses of NATO.

The most important manifestation of this is Europe. In the face of Russian power, there is no united European position. In the face of the financial crisis, the Europeans coordinate, but they do not act as one. After the summer of 2008, it is no longer fair to talk about Europe as a single entity, about NATO as a fully functioning alliance, or about a world in which the nation-state is obsolete. The nation-state was the only institution that worked.

This is far more important than either of the immediate issues. The fate of Georgia is of minor consequence to the world. The financial crisis will pass into history, joining Brady bonds, the Resolution Trust Corp. and the bailout of New York City as a historical oddity. What will remain is a new international system in which the Russian question — followed by the German question — is once again at the center of things, and in which states act with confidence in shaping the economic and business environment for better or worse.

The world is a very different place from what it was in the spring of 2008. Or, to be more precise, it is a much more traditional place than many thought. It is a world of nations pursuing their own interests and collaborating where they choose. Those interests are economic, political and military, and they are part of a single fabric. The illusion of multilateralism was not put to rest — it will never die — but it was certainly put to bed. It is a world we can readily recognize from history.

Tell Stratfor What You Think

This report may be forwarded or republished on your website with attribution to www.stratfor.comThis analysis was just a fraction of what our Members enjoy, Click Here to start your Free Membership Trial Today!If a friend forwarded this email to you, click here to join our mailing list for FREE intelligence and other special offers.Please feel free to distribute this Intelligence Report to friends or repost to your Web site linking to www.stratfor.com.

Sunday, October 26, 2008

Russia could buy back Alaska or perhaps Canada could pick up sunny Florida

By ERIC MARGOLIS, TORONTO SUN

Last Updated: 19th October 2008, 4:30am

At the end of Second World War the British Empire still ruled nearly a quarter of the globe. But the war bankrupted Britain. Its once mighty empire quickly collapsed and the United States inherited much of the British Imperium.

Six decades later the United States is close to bankruptcy thanks to a national orgy of borrowing, the replacement of manufacturing by financial manipulation, ruinous foreign wars and a government whose stunning incompetence and arrant stupidity was exceeded only by its reckless imperial arrogance.

The financial panic now gripping the planet, and the ignominious collapse of Wall Street, showed the American colossus had feet of clay. Washington's furious printing of untold billions of new dollars to prop up its sinking economy, finance this year's $1 trillion deficit and pay debts may unleash a storm of dangerous inflation.

The world balance of power is already shifting. For example, Pakistan's new president, Asif Zardari, went cap in hand this week to China, seeking up to $6 billion US in emergency loans. Pakistan is on the verge of bankruptcy and may shortly default on its debt.

But Pakistan's patron, the United States, which has been renting that nation's politicians and army for $1.2 billion per annum to support the occupation of Afghanistan, can't spare any cash for Pakistan. So Pakistan is turning to China, which has $19 billion in foreign exchange reserves -- the world's largest. The U.S.-led occupation of Afghanistan is likely to be adversely affected by Washington's new pauper status.

Bankrupt people, companies and nations have to sell assets to meet their debt obligations. China and Japan alone hold over $1.5 trillion of U.S. government securities (IOUs).

Their nervous central bankers now want real assets rather than more paper.

So there is talk of America's Asian creditors converting their IOUs into shares in U.S. corporations and property.

Sovereign wealth funds from the Arab oil states and Singapore may soon demand chunks of such assets.

In the 19th century European imperial powers used to force loans on China and local rulers in the Mideast and Latin America. When the locals could not pay off their debts, parts of their territory were seized. Russia was forced to sell Alaska to the U.S. for next to nothing when it could not repay its debts.

China's coast was carved up by the British, French, Germans, Russians, Americans and Japanese. These imperial foreclosures created the trading"concessions" of Hong Kong, Shanghai, Tsingtao, Tianjin, and Port Arthur.

Now, it's payback time for China. How ironic that the Chinese Communists have ended up with a so far sound financial system while the Wall Street bandit capitalists have gone bust.

To help pay its monster debts, I suggest Washington consider selling Louisiana back to France. Canada, whose banking system remains solid thanks to being what Americans called "boring and stodgy," ought to pick up Florida for a song. Canadians have a manifest destiny for sunshine.

Mexico will want to buy Texas, Arizona and New Mexico. Russia, of course, will buy back Alaska and Washington State. China will purchase California; San Francisco will become "New Beijing."

Japan will buy up Washington State, Oregon, Montana, and Hawaii. Holland will repossess New York State, and Germany will buy Pennsylvania and Minnesota.

JUST LIKE BRITAIN

Pakistan's move into China's financial embrace is a harbinger of things to come. Unless the U.S. quickly repairs its economy, its world power could slip away as quickly as post-war Britain's, leaving China, Japan, Russia, the EU and India as the world's new super powers.

This may not be so awful. All power, as Lord Acton famously said, corrupts; and absolute power corrupts absolutely. As the world's sole superpower, the U.S. under the Bush administration became totally corrupted by imperial hubris, financial fraud, lust for resources and greed.

A world with more balanced, diffused power may be preferable. But what if cash-rich China steps into America's imperial boots much sooner than anyone expected?

The debate over whether we will have inflation or deflation has been answered: First deflation, then inflation - and both may be on a massive scale.

Debt-based money is being destroyed by credit contraction led defaults. On the real accounting books, not the ones used to produce government statements for public consumption, the amount of dollars being destroyed currently exceeds the amounts of new fiat dollars coming into the system. Basket cases for the last few years, the US dollar, and to an even greater extent the Japanese Yen, are zooming up against all other fiat currencies, oil and gold.

In an environment of both de-leveraging and deflation, rather than launching a new wave of money creation to free up frozen credit markets, the FED and its co-conspirators are currently buying up distressed companies and properties with their new bailout bill credits.

The endgame looks like this: After they have acquired full ownership and title from the weak hands of leveraged debtors who built their portfolios on margin and cheap credit, the serious new money creation will commence.

Those who will have just completed scooping up ownership and control for pennies on the dollar, will turn around and pay off their own new debts they took on in the process with inflated or even hyper-inflated dollars. It's good to be king.

One monkey wrench in the system could be the Arab dictators we have been propping up and the communist Chinese central bank made rich from all the manufacturing companies we helped create under its control. Together, this team, if they are not totally in league with the criminals who set this mess up in the first place, might decided to create a new monetary system sans the USD.

There is no honor among thieves.

Could a world reserve currency like a gold backed Dinar be in the works?Judge for yourselfhttp://www.gold-eagle.com/editorials_08/willie102308.html

On the morning of Oct. 20, as humanitarian aid worker Gayle Williams walked to work in Kabul, Afghanistan, two men on a motorcycle approached and shot her multiple times before speeding off. The Taliban have claimed responsibility for the assassination of the 34-year-old British citizen from South Africa. Taliban spokesman Zaibullah Mujahid told The Associated Press that his group killed Williams because she “came to Afghanistan to teach Christianity to the people of Afghanistan.” Williams’ organization, Serving Emergency Relief and Vocational Enterprises (SERVE), denied the charge.

In a message on SERVE’s Web site, the organization noted that Williams had worked for nearly two years in Kandahar and Kabul directing projects designed to integrate disabled Afghans into the mainstream educational system. SERVE has a long history of working with the needy and with refugees in Afghanistan. The organization was founded in 1972 to help famine victims in Ghor province, and began to work with Afghan refugees in Pakistan in 1980. Since 1992, the group has focused on work inside Afghanistan, providing assistance to refugees returning to Afghanistan and vocational training for the disabled.

In September 2007, we discussed the burgeoning kidnapping industry in Afghanistan and how the Taliban were beginning to focus on humanitarian workers — not only as a moneymaking enterprise, but also as a political lever. Indeed, reports from organizations such as the Afghanistan NGO Safety Office (ANSO) and the Agency Coordinating Body for Afghan Relief indicate that attacks on aid workers have increased dramatically in 2008. According to ANSO, the 19 humanitarian aid workers killed in the first half of 2008 surpassed the 15 killed in all of 2007, and the death toll has continued to mount.

The brazen attack against Williams follows other deadly attacks against aid workers in August and September. On Aug. 13, a marked International Rescue Committee vehicle was attacked in a small-arms ambush in Logar province. The attack resulted in the deaths of one U.S. citizen, two Canadian citizens and an Afghan driver. On Sept. 14, a suicide bomber attacked a marked U.N. Assistance Mission for Afghanistan vehicle in the Spin Buldak district of southern Kandahar province. Two Afghan doctors — working to inoculate Afghan children against polio — and their driver died in the attack.

The increase in attacks against humanitarian workers shows that the Taliban have made a strategic decision to target them. Additionally, from the targeting of non-Christian workers, it is obvious that the issue goes much farther than just a desire to combat proselytism. The Taliban clearly see Afghanistan’s many foreign missionary and secular humanitarian aid organizations as supporting the Afghan government, and they believe that driving these organizations out of Afghanistan will be a blow to the government’s efforts to promote stability in the country. Because of this, we anticipate the Taliban will continue to target aid workers in the country, and not just those connected to Christian organizations.

The targeting of humanitarian aid workers goes far beyond Afghanistan, however. And the practice is becoming a point of contention between jihadist ideologues and militant groups.The Somalian Example

A similar campaign by jihadist militants designed to force humanitarian workers out of a country has been under way for the past few years in Somalia. Chaos has reigned in Somalia since the late 1970s, becoming a full-blown humanitarian crisis and civil war in the early 1990s. Somalia has never really recovered from that war. Incessant violence still rages, and because of the violence, there are currently millions of internally displaced people — aka refugees — dependent on foreign humanitarian aid for survival. According to U.N. estimates, 3.2 million Somalians (or 43 percent of the country’s population) are dependent on such aid.

The Islamist militants in Somalia are fighting the government of President Abdullahi Yusuf and the Ethiopian troops keeping Yusuf in power. The militants understand the importance of international aid to internal stability, and have sought to use attacks against aid as a weapon against the government. Groups such as the al Qaeda-linked al Shabab have launched many attacks against humanitarian aid workers since 2006 and have been able to use kidnapping and assassination to drive most of the foreign aid workers out of the country.

Even with the foreign aid workers gone, the militants have continued their attacks against World Food Program (WFP) shipments and Somalian employees of aid organizations. In the past week alone, two U.N. employees were assassinated in Somalia. On Sept. 17, Abdenasser Adan Muse, a senior program assistant for the WFP, was shot three times as he left a mosque in the town of Merca. On Sept. 19, Mukhtar Mohammed Hassan, a water engineer working with the U.N. Children’s Fund, was shot dead in Huddur as he walked with friends after attending a local mosque.Tensions

Of course, the decision to target humanitarian aid workers significantly impacts the people deprived of the aid such organizations offer, including programs to provide food, water and medical care.

One of the things that helped turn the tide of public opinion against the jihadist militants in Iraq — including groups like al Qaeda in Iraq headed by Abu Musab al-Zarqawi — was the violence the groups perpetrated against civilians, and among those innocent civilians were employees of nongovernmental organizations. In addition to the murders of aid workers such as Margaret Hassan of CARE International, militants conducted an attack using a large vehicle-borne improvised explosive device (VBIED) against the Baghdad headquarters of the United Nations in August 2003. The bombing resulted in the death of Sergio Vieira de Mello, the U.N. High Commissioner for Human Rights in Iraq. The U.N. headquarters came under attack again in September 2003, and following the second attack, all U.N. personnel were withdrawn from the country, along with many other international humanitarian aid workers.

Just over a month after the second U.N. bombing in Baghdad, the International Committee of the Red Cross (ICRC) headquarters in Baghdad was attacked by militants using a powerful VBIED. But al-Zarqawi’s forces are not the only ones who have attacked the ICRC. In addition to the Baghdad attack, ICRC workers have been abducted or attacked by jihadists in several other places, including Ethiopia, Somalia and Afghanistan.

Not only have the attacks against ICRC personnel gained the attention of the people denied humanitarian assistance as a result, they have also lead to a significant buildup of tensions among jihadist ideologues over the subject of attacks against humanitarian workers.

This tension can be seen in the writings of Isam Mohammed Taher al-Barqawi, more popularly known by the nom de guerre Abu Muhammad Asem al-Maqdisi, considered by many to be the world’s leading jihadist theoretician. Since his release from Jordanian custody in March, al-Maqdisi has released a number of new writings on jihad. Unlike other jailed jihadist theoreticians — such as Egyptian ideologue Sayyed Imam al-Sharif, aka Dr. Fadl — al-Maqdisi has not recanted his jihadist beliefs.

In the recently released Chapter 19 of his book “Thoughts on the Fruit of Jihad,” al-Maqdisi has taken a clear stand against targeting “genuine” humanitarian organizations. Al-Maqdisi specifically referred to the ICRC, noting how it is a legitimate humanitarian organization with no hidden agenda whose valuable services to the poor and dispossessed should be appreciated.

Al-Maqdisi wrote about his own personal experiences with the ICRC since 1994. Much of his time since then has been spent in prison in Jordan, and according to his writings, he had much positive interaction with the ICRC during that time. During such a prison stint in the mid-1990s, al-Maqdisi became acquainted with al-Zarqawi, who was greatly influenced by al-Maqdisi’s teaching. Al-Maqdisi would later repudiate al-Zarqawi over the latter’s targeting of Shiite noncombatants and their religious facilities in Iraq, which had caused thousands of deaths. Al-Zarqawi responded that his former mentor had strayed from the jihadist cause.

Al-Maqdisi wrote Chapter 19 in response to incidents such as the 2003 bombing of the ICRC office in Baghdad. In it, he urges jihadist militants to refrain from attacking genuine humanitarian organizations.Where the Rubber Meets the Road

Al-Maqdisi is widely respected in the Arabic-speaking jihadist world, but we know from historical precedent that al-Zarqawi and company did not follow his philosophy about targeting the Shia and other noncombatants in Iraq when they believed that tactical considerations outweighed such overreaching principles. It is also noteworthy how disregarding al-Maqdisi’s guidance to militants in Iraq — and the subsequent blowback — was a significant factor in their downfall.

There is precedent for this type of ideological tension and pressure causing jihadist groups to abandon widely used tactics. One such example was the jihadist beheading videos, which proliferated after the highly publicized February 2002 video of the beheading of journalist Daniel Pearl by Khalid Sheikh Mohammed (KSM) in Pakistan. Jihadists in places like Iraq and Saudi Arabia quickly copied the tactic, and it was used in many videos released by these groups in 2003 and 2004.

As this tactic spread, it was condemned by the al Qaeda core leadership. Even though the practice had been begun by KSM, a senior al Qaeda operative, the leadership gauged the response to the videos and deemed the practice to be counterproductive to their overall goals. This condemnation was clearly evident in the letter from Ayman al-Zawahiri to al-Zarqawi intercepted by the U.S. government and released in October 2005. Significantly, the practice of jihadist groups beheading hostages on video has declined markedly since the core al Qaeda leadership expressed their opposition to it.

Al-Maqdisi’s stance on the issue of killing humanitarian aid workers, and specifically ICRC members, is clear, and his stature will cause militant groups to pay attention to his opinion. It should be noted, however, that wiggle room for militants will remain if they claim, as the Taliban did in the Williams case, that the target of their attack was involved in proselytism. The Taliban were undoubtedly already under pressure in that case to justify their assassination of a woman, something considered very unmanly in Afghan culture.

Given this evolving intra-jihadist debate, signs should be looked for of a tactical shift in places like Somalia, where attacks against humanitarian organizations have been widespread, or in Afghanistan, where such attacks have been rapidly growing in number. So far, tactical considerations have outweighed ideological arguments against such attacks, and we see no end in sight to such attacks. But with al-Maqdisi’s pronouncement, the pressure against such attacks will surely grow and the topic should spawn a lot of discussion and division in militant circles. This discussion may ultimately lead to a change in tactics.

Tell Stratfor What You Think

This report may be forwarded or republished on your website with attribution to www.stratfor.comThis analysis was just a fraction of what our Members enjoy, Click Here to start your Free Membership Trial Today!If a friend forwarded this email to you, click here to join our mailing list for FREE intelligence and other special offers.Please feel free to distribute this Intelligence Report to friends or repost to your Web site linking to www.stratfor.com.

"The FDA [The enforcement arm of Big Pharma!] is the enemy of the People. It is a criminal organization bent on destroying American freedoms and consumer health. It operates with impunity, using its own secret compliance officers, wreaking death and destruction across our nation like a dark plague unleashed. If we hope to ever regain our health, our freedoms and the basic human right to tell the truth about the healing properties of simple foods, then we must bring this agency to justice and prosecute its mob bosses for their many crimes against the People."

See all CounterThink cartoons...

Comments by Mike Adams, the Health Ranger(NaturalNews) NaturalNews has learned the U.S. Food and Drug Administration is running a criminal extortion racket designed to drain cash from health supplement companies and shift it into the pockets of top FDA contractors. This organized crime operation has been running for years, and it has operated with impunity because each company targeted by the scam feels isolated and alone, unable to face the astronomical legal bills of going to court and battling the FDA. So one by one, they agree to "settle" with the FDA for crimes they never committed. Part of the settlement, of course, involves the payment of FDA employees or contractors who pocket the money extorted from health companies.

NaturalNews has interviewed executives from three different companies who have been targeted for extortion by U.S. Food and Drug Administration employees. At their request, the names of those companies are being kept confidential until legal action being taken against them is resolved. Interviews have been recorded, with permission, with two of those companies and will be released to the public at a later date. Documents proving this FDA extortion racket are included here.

How the FDA extorts money from nutritional supplement companiesThe FDA extortion racket works like this: FDA employees use keyword-scanning software to scan the web pages of natural health product and supplement companies, searching for terms like cancer, cures, treatment, remedies and other "forbidden" words. FDA employees then review the discovered pages to determine if they contain any words that might inform consumers of the health benefits of the nutritional products. FDA employees also look for links that might point web users to scientific articles from peer-reviewed medical journals that further explain the health benefits of specific foods, supplements or nutrients.

When offending words or links are found by the FDA, their extortion team goes into full swing. First, they contact the company and warn them to remove all information and links from their websites. This is the most important step from the FDA's standpoint, because by doing this, they can keep the health-conscious public in a state of nutritional ignorance about the scientifically-supported healing properties of natural supplements. Cherry products, for example, cannot link to scientific articles explaining the simple biological fact that cherries ease inflammation in human beings. Such links are considered "drug claims" by the FDA.

NaturalNews has even learned that companies are now being targeted for simply posting customer testimonials, even when those testimonials make absolutely no health claims. FDA and FTC agents are now threatening the owners of such companies with imprisonment if they do not immediately remove all customer testimonials from their websites and marketing materials.

If the company being targeted for extortion refuses to fully comply with the FDA's requests to remove all educational information from their website, the FDA then escalates the extortion tactics by threatening the company principals with arrest and seizure unless they agree to pay hundreds of thousands of dollars to top FDA contractors and sign a "consent decree" where the company "admits" to committing various crimes (see below). This consent decree is a blatant violation of the Constitutional rights of U.S. citizens, of course, and it violates numerous sections of the Bill of Rights (Amendments #1 and #5, at the very least).

The FDA employees or contractors receiving the extorted money, it is claimed, are being paid to "review web pages" to make sure they don't contain anything that might inform consumers about the scientifically-validated benefits of the health products being sold. FDA extortion agreements specify that FDA employees should be paid the rate of $100 per hour, with no limit on the number of hours they may bill the company for. The extortion agreement also requires companies to pay for all the following:

• $100 per hour for the travel time of FDA employees.• Hotel rooms for FDA employees.• Storage fees for all products seized by the FDA.

The same agreement also requires the company to comply with FDA demands by never placing any links or "illegal" information on its website, where "illegal" means anything that offers an accurate description of the health benefits offered by natural health products.

The Consent DecreePart of the FDA's strategy for oppression and control is to force targeted companies to sign a "consent decree" where they admit to crimes they never committed. NaturalNews obtained a copy of a public court document the FruitFast company was forced to sign due to FDA threats and extortion tactics.

You can view this document yourself at: http://www.NaturalNews.com/investigatio...

This document requires the FruitFast company to admit to crimes it did not commit; namely:

"Violating the Act, by introducing or delivering for introduction, or causing to be introduced or delivered for introduction, into interstate commerce articles of drug that are misbranded within the meaning of 21 U.S.C. SS 352(f)(1)."

What "drugs" did the FruitFast company introduce that were "misbranded?" Cherries, it turns out. Cherry juice concentrate was being sold with the accurate statement that it helped eliminate gout (which it does). This, according to the FDA, was enough to magically transform cherry juice into an "unapproved drug" and cause it to be "misbranded."

It also requires targeted companies to contractually agree that they have:

"...removed all claims from Defendants' product labels, labeling, promotional materials, websites owned or controlled by Defendants, and in any other media that cause that product to be a drug and/or contain unapproved or unauthorized health claims within the meaning of the Act; and

(ii) removed, from their product labels, labeling, promotional materials, and websites owned or controlled by Defendants, references to or endorsements of any other website that conveys information about Defendants' products that cause those products to be a drug and/or contain unapproved or unauthorized health claims within the meaning of the Act."

This means, of course, that these companies can no longer even LINK to other websites, including websites of scientific journals that discuss the proven health benefits of such natural products (foods, herbs, etc.)

The truth is now subject to FDA approvalOnce a company removes all educational information and links from their website, they are then required to submit to draconian measures of "censorship enforcement" by the FDA. This is fully explained in this section of the FDA's Consent Decree: (bolding added for emphasis)

Within ten (10) calendar days of FDA's request for any labels, labeling, promotional materials, and/or downloaded copies (on CD-Rom) of any internet websites owned or controlled by Defendants or websites referenced by, endorsed, or adopted directly or indirectly by Defendants, Defendants shall submit a copy of the requested materials to FDA at the address specified in paragraph 19.

Within twenty (20) calendar days of entry of this Decree, Defendants shall submit to FDA a certification of compliance, signed by each of the individually-named Defendants in this matter, each Defendant stating that he: (a) has personally reviewed all of Defendants' product labels, labeling, promotional materials, and the internet websites referred to in paragraph 8 above; and (b) personally certifies that the product labels, labeling, promotional materials, and internet websites strictly comply with the requirements of the Act and its regulations and do not include unapproved or unauthorized claims that the products cure, mitigate, treat, prevent and/or reduce the risk of disease. Thereafter, Defendants shall submit certifications of compliance every three (3) months for a period of two (2) years.

Furthermore, the FDA then requires that the company being targeted by the extortion racket hire a person (called the "expert") to enforce all this censorship the company has agreed to.

As you'll note in the language below, this "expert" must be paid $100 an hour, for an unlimited number of hours, to conduct surprise inspections of the company's administrative offices, warehouses and fulfillment centers:

Within fourteen (14) calendar days of entry of this Decree, Defendants shall retain an independent person or persons (the "expert")... who by reason of background, experience, education, and training is qualified to assess Defendants' compliance with the Act, to review the claims Defendants make for all of their products on their product labels, labeling, promotional material, any internet websites owned or controlled by Defendants, including, but not limited to, the websites referred to in paragraph 8 above. At the conclusion of the expert's review, the expert shall prepare a written report analyzing whether Defendants are operating in compliance with the Act and in particular, certify whether Defendants have omitted all claims from their product labels, labeling, promotional materials, websites owned or controlled by Defendants, and in any other media, that make any of their products drugs and/or constitute unapproved or unauthorized health claims within the meaning of the Act. The expert shall also review Defendants' product labels, labeling, promotional materials, and websites owned or controlled by Defendants to determine whether these include any references to or endorsements of any other websites that convey information about Defendants' products that cause those products to be a drug and/or contain unapproved or unauthorized health claims within the meaning of the Act, and certify in the written report whether Defendants have omitted any such references or endorsements. The expert shall submit this report to FDA and Defendants within thirty-five (35) calendar days of the entry of this Decree. If the expert reports any violations of the Act, Defendants shall, within seven (7) calendar days of receipt of the report, correct those deviations, unless FDA notifies Defendants that a shorter time period is necessary.

In other words, this section requires the company being targeted to pay the "Expert" huge fees to make sure it doesn't "illegally" link to other websites that might tell the truth about the health products in question.

FDA tyranny unleashedSo what happens if the company slips up and does something illegal like, let's say, posting a clickable link to a science journal that discusses research citing the health benefits of cherries? As you'll see below, there are no limits to the action the FDA can take in retribution, including the seizure of all company assets and the arrest of its principals.

Specifically, the Consent Decree forces company owners to agree to the following:

If, at any time after this Decree has been entered, FDA determines, based on the results of an inspection, the analyses of Defendants' product labels, labeling, promotional materials, websites owned or controlled by Defendants, or websites referenced by, endorsed, or adopted directly or indirectly by Defendants that convey information about Defendants' products, a report prepared by Defendants' expert, or any other information, that additional corrective actions are necessary to achieve compliance with the Act, applicable regulations, or this Decree, FDA may, as and when it deems necessary, direct Defendants, in writing, to take one or more of the actions:

D. Take any other reasonable corrective action(s) as FDA, in its discretion, deems necessary to bring Defendants and their products into compliance with the Act, applicable regulations, and this Decree.

Surprise inspections, secret police and non-stop persecutionJust to keep the targeted company in a state of constant fear (which is why I have labeled the FDA a terrorist organization), the FDA forces it to agree to surprise inspections where it must pay FDA "compliance officers" to rummage through their product shelves and paperwork, looking for evidence of non-compliance:

Duly authorized representatives of FDA shall be permitted, without prior notice and as and when FDA deems necessary, to make [surprise] inspections of Defendants' facilities and, without prior notice, take any other measures necessary to monitor and ensure continuing compliance with the terms of this Decree. During such inspections, FDA representatives shall be permitted prompt access to buildings, equipment, in-process and finished materials, containers, labeling and other materials therein; to take photographs and make video recordings; to take samples of Defendants' finished and unfinished materials and products, containers, labels, labeling, and other promotional materials; and to examine and copy all records relating to the receipt, manufacture, processing, packing, labeling, promoting, holding, and distribution of any and all Defendants' products in order to ensure continuing compliance with the terms of this Decree. The inspections shall be permitted upon presentation of a copy of this Decree and appropriate credentials. The inspection authority granted by this Decree is separate from, and in addition to, the authority to conduct inspections under the Act, 21 U.S.C. §374.

And just to make sure the company is further driven into bankruptcy, the FDA requires them to PAY for all these surprise "compliance" investigations! As stated in the Consent Decree:

Defendants shall reimburse FDA for the costs of all FDA inspections, investigations, supervision, reviews, examinations, and analyses specified in this Decree or that FDA deems necessary to evaluate Defendants' compliance with this Decree. The costs of such inspections shall be borne by Defendants at the prevailing rates in effect at the time the costs are incurred. As of the date that this Decree is signed by the parties, these rates are: $78.09 per hour and fraction thereof per representative for inspection work; $93.61 per hour or fraction thereof per representative for analytical or review work; $0.485 per mile for travel expenses by automobile; government rate or the equivalent for travel by air or other means; and the published government per diem rate or the equivalent for the areas in which the inspections are performed per-day, per-representative for subsistence expenses, where necessary. In the event that the standard rates applicable to FDA supervision of court-ordered compliance are modified, these rates shall be increased or decreased without further order of the Court."

Are you getting the picture here? The FDA can simply show up on a "surprise" inspection, bring ten FDA agents, bill the company for thousands of hours, and bankrupt the company while padding its own pockets.

Doesn't this sound a lot like the King's Consent Decree against the American colonies? The FDA's agreement reads amazingly like a document a King might force his subjects to sign as he's taking over their land and gold, imprisoning them in his kingdom.

But it gets better: The FDA also requires the Defendants to reveal all sorts of details about their business operations:

"Within ten (10) calendar days of entry of this Decree, Defendants shall provide FDA a list of all domain names and IP addresses they use to market or describe any product, regardless of whether such sites mention specific products Defendants sell.

Defendants shall notify the District Director, FDA Detroit District Office, in writing at least fifteen (15) calendar days before any change in ownership, character, or name of its business.

If Defendants fail to comply with any of the provisions of this Decree, including any time frame imposed by this Decree, then, on motion of the United States in this proceeding, Defendants Brownwood Acres and/or Cherry Capital shall pay to the United States of America the sum of one thousand dollars ($1,000) in liquidated damages per violation per day so long as such violation continues.

Should the United States bring, and prevail in, a contempt action to enforce the terms of this Decree, Defendants shall, in addition to other remedies, reimburse the United States for its attorneys* fees, investigational expenses, expert witness fees, travel expenses incurred by attorneys and witnesses, and administrative court costs relating to such contempt proceedings.

And finally, just to make sure everybody knows who's in charge, here's what the agreement says about final judgment:

All decisions specified in this Decree shall be vested in the discretion of FDA and shall be final.

In other words, the FDA is the King. It is above the law. It answers to no one but itself.

Welcome to the United States of Tyranny, FDA style.

The full text of the FDA's agreement, including the names of the top FDA criminals who signed it, is included at the end of this article.

This brand of tyranny is reserved for health supplement companiesWhile the FDA gives drug companies a free pass of easy approval for dangerous drugs, this Consent Decree is the kind of treatment it slams down upon health product companies. As you can see from the text in the decree, above, this is a document of outright tyranny and oppression.

Any company signing this document gives the FDA all the tools it needs to drive that company completely out of business. Sadly, dozens of companies have signed this in just the last year. The FDA's reign of terror is working. It's putting health companies out of business and forcing them to censor themselves. It even forces them to remove all web links to information sources like NaturalNews.com or peer-reviewed science journals.

This is all part of the FDA's campaign of health illiteracy -- a war of disinformation being waged against the American people. It is a secret war being fought out of the view of the mainstream media (which refuses to report this story) and far from the scrutiny of the U.S. Dept. of Justice (which doesn't care about the real tyrants running loose in this country).

As I have often stated here on NaturalNews.com, the FDA is an out-of-control, rogue agency engaged in acts of terrorism against the American people. By itself, it is negligent in the deaths of tens of millions of Americans, and it has taken it upon itself to increase the body count by making sure consumers have zero access to honest, truthful, scientifically-validated information about the healing properties of health supplements.

The FDA, by any account, is a much greater threat to the security and safety of the American people than any terrorist group, and if the U.S. really wanted to fight terror and tyranny, it would start by arresting top FDA officials at gunpoint. Those targeted for arrest and prosecution should also include the lawyers and paper pushers involved in this very agreement (see their names on the legal documents at the end of this article).

In my view, these people are the real criminals at work here. They are the masterminds of this campaign of extortion and terror being leveled against health companies by the rogue U.S. Food and Drug Administration. Much like Hitler's top generals, they play an important role in the mass disinformation that's resulting in the needless death of millions of people. By any account, they are all guilty of crimes against humanity and should be arrested and prosecuted as such. We should all be so fortunate to live to the day where we can see these white-collar criminals behind bars, perhaps sharing their jail cells with other war criminals from the Bush Administration.

Sign this or you'll be arrestedWhat you haven't yet seen in all this is the barrage of threats leveled against companies if they don't sign this Consent Decree! Company executives receive both written and verbal threats from top FDA "enforcement officers" who claim they will "throw you in prison" if you don't sign the agreement.

Every major health trade show hosts an FDA compliance officer (much like a Nazi Gestapo officer) whose job it is to walk the show floor and threaten companies into compliance. This includes shows like Expo West and Expo East, where show organizers also serve as de facto FDA agents themselves, barring the participation of exhibitors who dare to tell the truth about their natural products. This smacks of KGB secret police operations in the former Soviet Union. But secret FDA police are now a reality in the United States of America.

NaturalNews has learned of numerous verbal threats from FDA compliance officers directed at health supplement companies during trade shows, including threats to "put you out of business," "throw you in prison" or "take every last dollar you've ever earned."

FDA compliance officers are the foot soldiers of the agency's war against the truth. They seek out any health claim that might inform consumers about the properties of nutritional supplements, then they work to squash such statements before they become too well known. In essence, they are censorship officers who enforce nutritional illiteracy and prevent knowledge from being shared.

As such, they are acting not merely as secret police on a mission to destroy small American businesses; they are actually agents of disinformation, bent on destroying knowledge and enforcing a system of mandatory ignorance. This is entirely consistent with the FDA's history of ordering the destruction of recipe books that promoted the use of the natural herb stevia, among many other examples of information suppression.

The FDA's campaign of health illiteracy and enforced ignoranceIt is the FDA's position that there is no such thing as any food, beverage, supplement or herb that has any health benefit whatsoever. Merely making such a claim instantly qualifies your product as a "new and unapproved drug," according to the FDA.

Officially, the FDA claims all health products are inert and have no properties other than their macronutrients (fiber, carbohydrates, protein, etc.).

There is only one class of substances that have any biological effect on the human body, the FDA claims: Pharmaceuticals. Only those patented, synthetic chemicals are allowed to be described as having benefits to human health.

This convenient position is entirely consistent with the protection of the profits of drug companies. It's no coincidence that the drug companies fund the FDA through "user fees," and most FDA employees are dependent on drug company money... except, of course, those FDA people earning their living by extorting millions of dollars from health product companies.

The upshot of the FDA's campaign against health supplements is that most of the American people remain nutritionally illiterate, oblivious to the scientifically-validated health benefits offered by tens of thousands of different nutrients, plants, supplements and products. To say that zinc speeds healing, or that vitamin D prevents cancer, or that resveratrol lowers high cholesterol is common sense in the scientific community, but it's a crime in the eyes of the FDA.

It's time to stop the FDA's reign of terror over health supplementsIt is time to end the FDA's extortion racket, restore Free Speech rights to health supplements, and bring the organized crime kingpins at the FDA to justice.

NaturalNews is organizing a list of companies who wish to help fund legal action against the FDA. We intend to take part in a lawsuit against the FDA that would reign in the FDA's control over nutritional supplements and defend health freedoms for American consumers.

To do this, we need to gather information from those companies who are willing to help fund this legal action, which may cost several hundred thousand dollars. If you represent a company willing to take part in this legal action against the FDA, contact us now at StopTheFDA@naturalnews.com

Simply email us your name and contact phone number. We'll contact you to continue the conversation. Any information sent to us is kept strictly confidential. We will refuse to turn over such information even with a court order.

With enough support from the natural products community, we will take part in the reporting and grassroots organization of this legal action.

We must stop the FDA nowIt is the belief of NaturalNews that the FDA is being run as a system of organized crime, using the exact same extortion tactics as the Mob. Through intimidation, censorship and threats of imprisonment, the FDA is right now extorting tens of millions of dollars from the very same health supplement companies you depend on to bring you lifesaving, disease-reversing products.

Even worse, the FDA is getting away with it. Backed by the threat of imprisonment and the ability to conduct armed raids against health product companies (see the history of armed FDA raids against vitamin companies here: http://www.naturalnews.com/021791.html ), the FDA is able to overpower health product companies when they stand alone.

The industry must band together if it hopes to defend itself against this tyranny. A lone villager cannot defend himself against a band of marauders, but an organized and well-defended band of villagers can fight off attackers many times their size. If it wishes to survive, the natural products industry must band together and defend itself against the FDA. It must take back its right to tell the truth about health supplements, and it must forever banish censorship and ignorance from the health products marketplace.

The FDA will not stop its reign of terror, you see, until every health supplement companies is silenced, every company founder is imprisoned and every consumer is enslaved in a state of outright nutritional illiteracy. They will seize products and let them rot in warehouses; they'll recruit armed law enforcement personnel to conduct SWAT-style raids on vitamin shops; they'll extort millions of dollars from health companies and pocket the profits; and they'll do it all while burning taxpayer dollars and claiming they're working to "protect" consumers from natural health products like cherry juice concentrate, which is of course so incredibly dangerous that we need an entire government agency just to make sure we don't find out it might ease arthritis inflammation.

What you can do right now to help halt the FDA's reign of terrorAs a consumer, you can use your voice to help stop the FDA from destroying the natural products marketplace. Simply go to www.ReformFDA.org and sign the petition there.

It's sponsored by the American Association for Health Freedom (AAHF), an organization fighting to end the FDA's tyrannical rule over the health of the American people.

Sign that petition and spread the word: NaturalNews and the AAHF are working together to bring back honesty, freedom and free speech to the health supplements industry, and we need your help to get it done.

You can also protest the FDA with your Congressperson or Senator. Contact them and insist that they support efforts to end the reign of FDA tyranny and reestablish Free Speech rights for nutritional supplement companies.

Grab your cameras, folksFinally, NaturalNews urges those in the natural health community to go out and buy video cameras and still cameras and start snapping photos of rogue FDA agents arresting people, seizing products, accepting bribes or other outrageous acts. We cannot simply lie down and let the FDA march in to our company warehouses and seize products. One video can change the world. It's up to you to get that video recorded and get it to us here at NaturalNews. Use our feedback form to contact us: www.NaturalNews.com/feedback.html

We've also opened up an audio tips line, where FDA employees who wish to leak information to NaturalNews can anonymously call us and leave a message: (323) 924-1664

With your help, we will soon start publishing videos and photos showing FDA agents directly engaged in acts of tyranny against health companies. And for those who'd like to earn some extra money snapping photos, we're willing to pay you for photos of FDA "compliance officers" walking trade show floors where they threaten companies in person. Contact us for details if you're a photographer with a long lens who would like to start earning money snapping photos of FDA agents engaged in their dirty work.

It's time to shed light on the real actions of the FDA. We can no longer sit back and allow this criminal organization to operate in secret. But grabbing the public's attention all comes down to getting this on video. This is the YouTube era. If it's not on video, it doesn't exist. But if it's on video, we can likely get it on mainstream news. (I can see it now: the FDA raids a warehouse and handcuffs the screaming, crying business owner. And why? Because their bottle said, "Eases inflammation." The public won't stand for it.)

The FDA, of course, will have its own people doing the same thing to people like me. They're trying to catch us eating at McDonald's or going through the local pharmacy drive-thru. All I can say about that is they'll be waiting a long, long time to see that day!

Please forward this story to everyone you know. We the People must either prevail in this fight for our freedom, or we will all end up illiterate, imprisoned or silenced. The FDA will take away your rights, your speech and your health, and it will laugh all the way to the bank while it steals your hard-earned money. It will break every law, ignore every court order and commit every crime necessary to bring health companies into line... UNLESS we fight back and do our part to end this grave threat to our health, safety and freedoms.

The FDA is the enemy of the People. It is a criminal organization bent on destroying American freedoms and consumer health. It operates with impunity, using its own secret compliance officers, wreaking death and destruction across our nation like a dark plague unleashed. If we hope to ever regain our health, our freedoms and the basic human right to tell the truth about the healing properties of simple foods, then we must bring this agency to justice and prosecute its mob bosses for their many crimes against the People.

It is time to stand up for your health freedoms, or lose them forever. Please join me in this courageous stand against tyranny and oppression.

Yes, we're idiots: While distracted by the "illusion of democracy" in the endless campaign, Congress surrendered the powers we entrusted to it with very little fight. Congress simply handed over voting power and the keys to trillions in the Treasury to Wall Street's new "Disaster Capitalists" who now control "democracy."Why did this happen? We're in denial, clueless wimps, that's why. We let it happen. In one generation America has been transformed from a democracy into a strange new form of government, "Disaster Capitalism." Here's how it happened:

* Three decades of influence peddling in Washington has built an army of 42,000 special-interest lobbyists representing corporations and the wealthy. Today these lobbyists manipulate America's 537 elected officials with massive campaign contributions that fund candidates who vote their agenda. * This historic buildup accelerated under Reaganomics and went into hyperspeed under Bushonomics, both totally committed to a new disaster capitalism run privately by Wall Street and Corporate America. No-bid contracts in wars and hurricanes. A housing-credit bubble -- while secretly planning for a meltdown. * Finally, the coup de grace: Along came the housing-credit crisis, as planned. Press and public saw a negative, a crisis. Disaster capitalists saw a huge opportunity. Yes, opportunity for big bucks and control of America. Millions of homeowners and marginal banks suffered huge losses. Taxpayers stuck with trillions in debt. But giant banks emerge intact, stronger, with virtual control over government and the power to use taxpayers' funds. They're laughing at us idiots!

Amazing isn't it, Wall Street's Disaster Capitalists screwed up, likely planned or let happen this meltdown and recession. Yet America's clueless taxpayers just reward them by giving the screw-ups massive bailouts, control over more than $2 trillion of tax money, and the power to clean up the mess they made. Oh yes, we are dummies!This end game was planned for years in secret war rooms on Wall Street, in Corporate America, in Washington and the Forbes 400. Democracy is too cumbersome. It had to be marginalized for Disaster Capitalism to take over. Reagan, Bush and Paulson were Wall Street's "Trojan Horses."

Naomi Klein summarizes the game in "Shock Doctrine: the Rise of Disaster Capitalism." This "new economy" generates enormous profits feeding off other peoples' misery: Wars, terror attacks, natural catastrophes, poverty, trade sanctions, subprime housing meltdowns and all kinds of economic, financial and political disasters. Natural (Katrina) or manmade (Iraq), either way "disaster capitalism" creates fortunes.So you, me and the other 300 million better get out of denial. America is no longer a democracy. Voting is irrelevant. Best case scenario: We're a plutocracy, a government ruled by the wealthy, the richest 1%, the Forbes 400, the influential wealthy elite, while the other 99% are their "servants." Meanwhile, the inflation-adjusted income of wage-earners has declined for three decades.

Worst case scenario: America's no democracy and as a result of the meltdown and the surrender of our power to Wall Street's new Disaster Capitalism we are morphing into what one WWII dictator called "corporatism," a "merger of state and corporate power," kind of like what's going on now with Goldman Sachs' ex-boss as de facto president.Wolves in sheep's clothing

Yes, a strong charge. But like a lot of our readers, I don't like what's happening to America. I'm a patriot. I volunteered for the Marines. Served four years. Volunteered for Korea. I don't like how our freedoms, rights and value system are being subverted in the name of greed, arrogance, self-righteous intolerance and other false gods.We know for the last eight years disaster capitalists ignored obvious warnings of a coming meltdown. They apparently planned it. They road the bull, got very rich. Now they have the ultimate disaster capitalist weapons, trillions in tax money, virtual control of government.

That's why I fear we're on the edge of a dangerous line between Wall Street's version of disaster capitalism and a toxic "merger of state and corporate power." The wolf is in sheep's clothing. Wall Street pretends we're a democracy. Yet America more closely resembles the kind of "corporatism" that Laurence W. Britt wrote about five years ago in Free Inquiry magazine.

We adapted his historical analysis of 14 key traits for today's discussion. Notice how they have a huge impact your investments and retirement:

2. National security obsessionThink of the expansion of executive powers in the name of national security: Preemptive wars, wiretapping private citizens, Gitmo, torture; driven by a dark wealthy neocon elite.

3. Superpower with massive militaryThink of our $3 trillion Iraq/Afghan War. Disaster capitalists love the thrill of military power. We outspend all nations, over half the federal budget to strut before the world.

4. Extreme nationalismSigns are everywhere: Flags, lapel pins, "support the troops" slogans, all to get huge military budgets passed. Challenge them and you're un-American and unpatriotic.

Homeland Security to Change Airline Boarding ProcessVideoFliers Will Have to Give More Info. to AirlinesA long-delayed U.S. government program designed to more accurately prescreen the names of airline passengers against terror watch lists is expected to start early next year.» LAUNCH VIDEO PLAYER

The Department of Homeland Security will take responsibility from airlines for checking passenger names against watch lists beginning in January and will require all commercial passengers for the first time to provide their full name, date of birth and gender as a condition of boarding a flight, U.S. officials said today.

The changes will be phased in next year for the 2 million passengers each day aboard domestic and international flights to, from or over the United States. It marks the Bush administration's long-delayed fulfillment of a top aviation security priority identified after the Sept. 11, 2001 terrorist attacks, an effort that has long spurred privacy concerns.

Speaking at Reagan National Airport, Homeland Security Secretary Michael Chertoff and Transportation Security Administration chief Kip Hawley said that by gathering more personal information from passengers, the government will dramatically cut down on instances of mistaken identity that have wrongly delayed travelers or kept them off flights.

Over the years, countless travelers have faced difficulties because their names are similar to those on the agency's no-fly list or a second list of "selectees" identified for added questioning. They include infants and toddlers, Sen. Edward M. "Ted" Kennedy (D-Mass.), and the wife of Sen. Ted Stevens (R-Alaska), Catherine, whose name is similar to Cat Stevens, the former name of the watch-listed pop singer who converted to Islam.

"We know that threats to our aviation system persist," Chertoff said. "Secure Flight will help us better protect the traveling public while creating a more consistent passenger pre-screening process, ultimately reducing the number of misidentification issues."

Commercial passengers who do not provide the additional information will not be granted boarding passes, Hawley said, although he said he could envision rare exceptions.

"If you don't provide the data, then you are going to put yourself in a position where you are probably going to be a selectee," subject at a minimum to greater future security scrutiny, Chertoff added.

By taking over watch-list vetting from private industry, TSA also will be able to consistently apply the most up-to-date watch list information and sophisticated computer programs to catch variations of names, and to avoid the risk of giving sensitive data to foreign air carriers, Chertoff said.

To bolster their argument for the change, U.S. officials for the first time disclosed the number of individuals on the no-fly and selectee lists -- fewer than 2,500 and 16,000, respectively. Fewer than 10 percent of individuals on the no-fly list and less than half of those named on the selectee list are U.S. citizens, Chertoff said.

U.S. authorities have long refused to disclose the numbers, citing security concerns. Asked what had changed, Hawley cited the "secretary's judgment" that the public debate would be better informed by the lists' true size.

By comparison, since February 2007, DHS has received more than 43,500 requests for redress and completed 24,000 of them. About 2,700 remain under review and 16,500 await more documentation, TSA spokesman Christopher White said.

Hawley said authorities expect the added data will allow "99 percent" of travelers to avoid delays, or all but about 2,000 passengers a day. By comparison, the system now catches a passenger actually on the no-fly list about once a month, usually overseas, while actual "selectees" are encountered daily, he said.

Secure Flight cost taxpayers $200 million and five years to develop, and will cost an estimated $80 million a year to operate. It is one of a number of travel security measures that U.S. officials plan to implement in coming months to tighten the net against potential threats. Together they pose the greatest changes for passengers since TSA banned liquids and gels from carry-on baggage after authorities disrupted a British-based plot to bomb jetliners crossing the Atlantic in August 2005.

Starting next year, DHS has proposed requiring residents of roughly three-dozen friendly nations who can travel to the United States without a visa to register online with the U.S. government at least 72 hours before departure. Airlines and cruise lines also are being required to collect digital fingerprints from all foreign travelers as they leave the country.

Next June, DHS also is proposing to require all travelers entering the United States by land to present a passport or similar secure form of identification and proof of citizenship. Finally, DHS is pushing under its REAL ID initiative to require all domestic passengers to present more secure and standardized state-issued driver's licenses or equivalent ID cards as a condition of boarding flights.

In rolling out Secure Flight, homeland security officials left many details unclear. Final regulations are to be published by early November, after which airlines will have 60 days to begin sending required passenger data to TSA, and 270 days before they must have systems in place to do so.

Air carriers, particularly foreign airlines, say the changes duplicate other security measures. They say it will cost some of them millions of dollars and take several months to re-tool data systems to provide information, including passport numbers for passengers aboard foreign flights.

Privacy experts welcomed improvements to Secure Flight but said problems remained. U.S. officials said Secure Flight will not tap commercial data, conduct "data-mining" or generate risk scores on passengers, and will destroy information on most passengers after seven days. But the American Civil Liberties Union said the government still lacks adequate redress procedures for people mistakenly matched to secret watch-lists based on the government's master terrorist database, which identifies about 400,000 individuals.

Wednesday, October 22, 2008

Oct 20, 2008Islamic banking escapes falloutKUALA LUMPUR - ISLAMIC banking has largely escaped the fallout from the global financial crisis, thanks to rules that forbid the sort of risky business that is felling mainstream institutions.

But experts say that because of its heavy reliance on property investments and private equity, the booming 1.0 trillion dollar global industry could be hit if the turmoil worsens and real assets start to crumble.

'In the current financial turmoil, it is interesting to note that Islamic financing may have prevented a majority of the mess created by the conventional banking and financial institutions,' Kuwait Finance House said in a report.

'The outlook for Islamic financing is bright and will likely take the lead in terms of providing funding for major projects as the conventional banking system reevaluates its business model.'

The rules of Islamic banking and finance - which incorporate principles of sharia or Islamic law - read like a how-to guide on avoiding the kind of disaster that is currently gripping world markets.

Islamic law prohibits the payment and collection of interest, which is seen as a form of gambling, so highly complex instruments such as derivatives and other creative accounting practices are banned.

Transactions must be backed by real assets - not shady repackaged subprime mortgages - and because risk is shared between the bank and the depositor there is an incentive for the institutions to ensure the deal is sound.

Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.

Mr Zeti said this month that because of the slowing global economy, plans for Islamic 'sukuk' bonds had been postponed or scrapped by companies including Kuwait's Abyaar Real Estate Development and Malaysia's Perisai Petroleum.

And Ms Jennifer Chang, a partner at Pricewaterhouse Coopers in the Malaysian capital Kuala Lumpur, said that given the extent of the global crisis, Islamic banks may suffer damage despite their strong position.

'Islamic banks, especially in the Middle East, got heavily into private equity and real estate investments, and a lot of loans may be backed by properties. So if the property market goes down, there will be an impact,' she said.

'If a borrower is not able to pay then the bank will foreclose and the question is - can you sell the property in the market and at what value? These are issues which all banks can face.'

There have been calls for the conventional banking industry to take a leaf out of the book of Islamic finance, which also shuns investments in gaming, alcohol and pornography in favour of ethical investments.

Influential Sunni cleric Sheikh Yusuf al-Qaradawi earlier this month called on Muslims to take advantage of the turmoil to build an economic system compatible with Islamic principles.

'The collapse of the capitalist system based on usury and paper and not on goods traded on the market is proof that it is in crisis and shows that Islamic economic philosophy is holding up,' said the Egyptian-born, Qatar-based cleric.

In recent years the sector has broken out of its niche and been embraced by mainstream banks. As well as basic bank deposits and investment accounts, it has expanded into areas including equity funds, bonds and Islamic hedge funds.

Mr Abhishek Kumar, a senior research analyst at Financial Insights, a company under market research and analysis firm International Data Corp (IDC), said recent events may further boost the sector.

'More and more institutions will be interested in providing Islamic services to diversify their risk portfolio,' he said, while warning that in the current financial storm there were no absolutely safe harbours.

'We're not really sure what the real extent of the impact is, and whether we've passed the worst of it or not, But the extent is not going to be as bad as in the mainstream sector,' he said. -- AFP

About Me

ROLAND SAN JUAN was a researcher, management consultant, inventor, a part time radio broadcaster and a publishing director. He died last November 25, 2008 after suffering a stroke. His staff will continue his unfinished work to inform the world of the untold truths. Please read Erick San Juan's articles at: ericksanjuan.blogspot.com This blog is dedicated to the late Max Soliven, a FILIPINO PATRIOT.
DISCLAIMER - We do not own or claim any rights to the articles presented in this blog. They are for information and reference only for whatever it's worth. They are copyrighted to their rightful owners.
************************************
Please listen in to Erick San Juan's daily radio program which is aired through DWSS 1494khz AM @ 5:30pm, Mondays through Fridays, R.P. time, with broadcast title, “WHISTLEBLOWER” the broadcast tackle current issues, breaking news, commentaries and analyses of various events of political and social significance.
***************************************
LIVE STREAMING
http://www.dwss-am1494khz.blogspot.com